Good day forex traders and readers !
It is the weekend and I hope you are having a great time with your loved ones.
In our previous AUD/USD forecast and economic reviews we noted a bearish pressure for the currency pair. The Australian economy is also facing some challenges as the job outlook weakens. We also noted an interest rate cut by the Reserve Bank of Australia.
Looking at the AUD/USD daily chart above we do note an expected bearish shift right towards the strong support level of parity. The momentum is strong and hence caution must be taken so as to not catch a falling knife. The currency pair went below parity briefly.
Place a close watch on the parity levels. An area of high significant, we may be looking at a high level of uncertainty. Should this support fail, we may be looking at 0.9820 +/- .
The recent economic data from the Australian economy suggests a weaken resilience. With retail sales affected, this suggests a general slow down. The jobs outlook is also affected as figures shows indeed.
The cutting of the Australian interest rate also further brings across the outlook that the Australian economy is facing challenges. This easing of monetary policy will probably ease equities pressure however as we all know the effect of a low interest rate on currencies, I expect further pressure on the AUD/USD.